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  • #23,741
  • Mar 15, 2013 7:38am Mar 15, 2013 7:38am
Quoting abhinkoi
Thanks joaoborras. Will keep that in mind. Looks like it was an absorption volume only because the price is flying high now.
What news was expected?
Yeap, broke. The news was US Core CPI.
  • #23,742
  • Mar 15, 2013 7:40am Mar 15, 2013 7:40am
Quoting abhinkoi
Hi SimpleDev,

Yes you are right that they bought yesterday but seeing this selling, I believe they are offloading what they have bought yesterday. I may be wrong because you are talking on 15/30m chart and Im looking at 5 min. Of course on big TF the picture wud look different. The price has risen above the level I posted the chart at but still its making wide spread candles with huge volume which is forcing me to believe SM is offloading.

Please correct me if you think otherwise. I want to learn where im thinking wrong.
Appreciate your response....
From left to right

There is supply present on that up bar with high volume, but its closing on the highs, which is not weak.
A shake out prints, which if the market was weak we would be expecting some kind of UT.
A ND does come as price drifts down, but we have not seen any serious signs of selling so its doubtful that price will come down very far.

Price pushes up again on high volume and the bar closes above the previous top which is a good sign of absorption.

If this was being distributed we would have seen more climatic spreads and volume. Look at the bar in red, wider spread with a weak close very high volume that really pops out to you, that is a sign that EU is being sold. The previous top, there wasn't really any weak closes and other than the first bar that closed on it's high no real volume that just popped out at you.

The biggest thing is to understand your background, try to have a good idea of what the previous sessions did. If you look and aren't quite sure if previous session(s) bought or sold it might not be a bad idea to sit on the sidelines that day.
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  • #23,743
  • Mar 15, 2013 7:58am Mar 15, 2013 7:58am
Quoting SimpleDev
From left to right

There is supply present on that up bar with high volume, but its closing on the highs, which is not weak.
A shake out prints, which if the market was weak we would be expecting some kind of UT.
A ND does come as price drifts down, but we have not seen any serious signs of selling so its doubtful that price will come down very far.

Price pushes up again on high volume and the bar closes above the previous top which is a good sign of absorption.

If this was being distributed we would have seen more climatic spreads and volume....
Great explanation SimpleDev. I appreciate that. I learnt something new today. prices is consistently making new highs now. On D1 chart it is turning out from the bottom. Looks like a great bull run is about to come. What do u say?
  • #23,744
  • Mar 15, 2013 8:04am Mar 15, 2013 8:04am
Quoting joaoborras
Yeap, broke. The news was US Core CPI.
Thanks joaoborras. Any idea how to relate this news with EURUSD? I mean how to interpret to adjust your positions.
  • #23,745
  • Mar 15, 2013 8:06am Mar 15, 2013 8:06am
Quoting SimpleDev
From left to right

There is supply present on that up bar with high volume, but its closing on the highs, which is not weak.
A shake out prints, which if the market was weak we would be expecting some kind of UT.
A ND does come as price drifts down, but we have not seen any serious signs of selling so its doubtful that price will come down very far.

Price pushes up again on high volume and the bar closes above the previous top which is a good sign of absorption.

If this was being distributed we would have seen more climatic spreads and...
Only a comment about to look at what the previous session did is that, not many times 3 sessions will move in the same direction.
Therefore, if Asia bought/sold and London also bought/sold, the chances are high that we have a pull back in NY. Or, if NY bought/sold, Asia also bought/sold, then London may make the retrace to get better prices.
Exception, of course, is when the trend is fundamentally based or by any other reason.
But it is something to be cautious off.

Cheers!
  • #23,746
  • Mar 15, 2013 8:10am Mar 15, 2013 8:10am
Quoting abhinkoi
Thanks joaoborras. Any idea how to relate this news with EURUSD? I mean how to interpret to adjust your positions.
No idea! :-)
You see, in the last few days or weeks, when risk was on(good news in US), the dollar rose. Like Wednesday, for example.
But today, the euro rose...

I mean, usually, when risk is on, the high beta currencies tend to rise and, when risk is off, safe heavens like jpy and usd, tend to rise.
The equation was inverted these days. And today, it was different. :-)

The best answer that I have is: use VSA and all tools we have and follow the smart money! :-)
  • #23,747
  • Mar 15, 2013 8:34am Mar 15, 2013 8:34am
Thought i'd give my few pips over here, seeing as the VSA forum has more tumble weed than an old western.

I personally think we have reached a turning point in the market.*

We have had a sustained down move on the PnF charts since the end of January. We have hit two downside projected targets (red and blue) and have so far failed to hit the third target. The last count in a PnF trend will always be missed. A trend has to end at some point. We have also hit a huge downside target from the 4hr PnF chart, this was a projected 750 pip drop from 3710 which was hit at 2960 only last week. Over today and yesterday we have printed a nice reversal at the low which gives us an upside target of 3250.

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But this is a VSA thread I hear you say. Well, ok, let's talk about some volume then. The chart I posted above outlining all the targets has fibbed volume zones drawn on it. These are based on cumulative volume zones/areas as opposed to a finite amount of time. As I've said before, each column on a PnF chart can represent more than one hour of data. With this in mind, look at the chart below. There are three huge overlapping volume zones and we have (at the moment) bounced in the area where the two largest zones overlap one another. It was never going to be an easy ride to push down through here. For now, I think they've stopped the move and we're going to get a correction. Perhaps only as far as that upside target. But with a decent signal, i'll try take that!

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The next chart is slightly different. As I based the majority of my PnF charts on 1hr Hi/Lo counts I thought it only proper to carry over volume zones from the 1hr chart as well. So this chart is different in that each zone on the chart represents an ultra high volume 1hr bar carried from the HLC chart, over to my pnf chart. We bounced nicely off some high volume back at this area from the start of December.

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Last but not least, the hand drawn PnF charts I keep, we've broken the 45 degree trend line. Also signalling some strength.

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* I'm allowed to be wrong!
  • #23,748
  • Mar 15, 2013 8:48am Mar 15, 2013 8:48am
Some more important zones that we need to get through;
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  • #23,749
  • Mar 15, 2013 9:40am Mar 15, 2013 9:40am
Quoting KinsaleForex
Thought i'd give my few pips over here, seeing as the VSA forum has more tumble weed than an old western.

I personally think we have reached a turning point in the market.*

We have had a sustained down move on the PnF charts since the end of January. We have hit two downside projected targets (red and blue) and have so far failed to hit the third target. The last count in a PnF trend will always be missed. A trend has to end at some point. We have also hit a huge downside target from the 4hr PnF chart, this was a projected 750 pip drop from...
Very nice charts and analysis.
I just put some small comments on your chart, if you allow me. It is nothing different from what you said.
http://screencast.com/t/rZWjNtVbg

Cheers!
  • #23,750
  • Mar 15, 2013 10:12am Mar 15, 2013 10:12am
Quoting joaoborras
Very nice charts and analysis.
I just put some small comments on your chart, if you allow me. It is nothing different from what you said.
http://screencast.com/t/rZWjNtVbg

Cheers!
No probs at all, feel free to annotate any of them!

If you look at the very first chart in my first post you'll see all the counts I took for that up move from the base you outlined. 6 counts in total were hit, There was also an intermediate downside target within this uptrend that was missed by only 10 - 20 pips (yellow highlights.)
  • #23,751
  • Mar 15, 2013 10:43am Mar 15, 2013 10:43am
Quoting KinsaleForex
https://lh3.googleusercontent.com/-Z...s415/Snap7.png

can you please explain what is 3 & 10 in the chart are?

Thank you.
The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #23,752
  • Mar 15, 2013 11:46am Mar 15, 2013 11:46am
Quoting HiddenGap

Notice that the highest probability entry on the 3 min chart comes just after 10:00. That's because, and I could be wrong here (this is where the stuggle is), the trend on the higher time frame does not change to down until 10:00. If one is going to use multipe timeframes and trade in the direction of trend, doesn't one have to wait for the higher time frame (s) to confirm the lower time frame trend?

Looking forward to your (and anybody else who wants to chime in) repsonse.
I use the higher TF's to establish a trend first and then look at smaller tf to follow that and take positions on retracements, from what you describe above we see the higher tf is just establishing a new direction and to enter on the ND on the 3min chart you point out would be a bit early, you would have to wait for the next opportunity.Of course you also have to bear in mind that trends start from smaller tf's and then move to higher tf's so you could have a scenario where higher tf is still up where a smaller tf has eastblised a new down trend.
  • #23,753
  • Mar 15, 2013 1:03pm Mar 15, 2013 1:03pm
Quoting Vcv13
can you please explain what is 3 & 10 in the chart are?

Thank you.
Of course, in PnF charts there are a couple of user defined variables.

10 represents the box size, meaning each X and O represents a ten pip movement.

3 represents the reversal size in boxes, so 3 boxes is a 30 pip reversal. Meaning if we're in a column of X moving upwards we need a 30 pip retrace before the chart will print a column of Os.

Hope this helps.

Each count that is highlighted in colour on the chart takes into account the amount of boxes in the column. You'll see i have written "12 boxes, 1.3450" for example (might not be on the chart, I just made that up) This means there are 12 boxes in the column x 3 (reversal) x 10 (box size) = 360. So the target is 360 from the low of the column before. So the low would've been 1.3090 + 360 = 1.3450.

Hope this helps.
  • #23,754
  • Mar 16, 2013 3:12am Mar 16, 2013 3:12am
Quoting SimpleDev
Looks like our bus finally came.. with result.

Weekly still looks bearish, caution is still needed.
You've been all over this one. Very nice.

Now what are you thinking?
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,755
  • Mar 16, 2013 9:43am Mar 16, 2013 9:43am
Please would an experienced trader be able to confirm please my understanding of the accumulation phase:

'If we see accumulation during a long term range, we should see shrinking volume near support levels and an expanding volume near resistance.'

Am I right in the thinking that 'Smart money' is buying into the downmoves off of resistance and this represents the expanding volume near the range top, and also would it be correct to say that the low volume at the support levels is absorption. ie. the buyers are absorbing the selling and hence the low volume?

the above information is in a book by Karthik Mamar, so I am not sure how accurate it is, and to me it seems incorrect.

many thanks in advance!
Tracking the Specialists.
  • #23,756
  • Mar 16, 2013 5:16pm Mar 16, 2013 5:16pm
Quoting joaoborras
Only a comment about to look at what the previous session did is that, not many times 3 sessions will move in the same direction.
Therefore, if Asia bought/sold and London also bought/sold, the chances are high that we have a pull back in NY. Or, if NY bought/sold, Asia also bought/sold, then London may make the retrace to get better prices.
Exception, of course, is when the trend is fundamentally based or by any other reason.
But it is something to be cautious off.

Cheers!
You seem to be a profitable trader so I won't question your post.

However for the people that are reading this forum trying to learn forex, I would recommend using all of the tools in your toolbox. What I mean by that is even though you may only want to trade a 5m/15m chart study all of the time frames available to you from your 5m/15m up to the monthly chart. Also in your toolbox do your best to understand the previous sessions. Which doesn't mean that you will see clear SOS or SOW in every session.

Tom Williams describes VSA as "the consensus of smart money".

As to Friday I was watching all of my time frames and I saw clear signs of strength in the previous US session, and Asia the SOS was not as clear but it was there. So if the "consesus of smart money" showed that they were buying, then why would I do anything other than to buy? Here is a little VSA secret.. If you see that US bought and you can confirm that Asia bought as well, usually London or the following US session will have a significant run. Just look at Friday as a prime example.

VSA is not difficult, Friday was the equivalent of walking down the street and seeing a pile of money laying on the ground and all you had to do was pick it up. VSA becomes difficult when the consensus of smart money isn't all that clear, and inexperienced traders see a HV SO and think they see strength and take a trade and loose it. Be patient and wait for setups that just jump out and slap you across the face. The 30m from the previous US session did that Friday. Friday I risked 3% and banked 12.5%, you do not need to make a ton of trades to make money, wait for the obvious trades with the background in your favor.
  • #23,757
  • Mar 16, 2013 5:27pm Mar 16, 2013 5:27pm
Quoting HiddenGap
You've been all over this one. Very nice.

Now what are you thinking?
Quoting SimpleDev
Looks like a perfect EORM. Don't see those too often.

The UT I marked in red, at the time I was not too concerned with it due to it was on very low volume compared to the volume on previous days at the same time. Now adding the potential EORM, need to watch how price and volume react to 1.0250.
When I made the post about the EORM I sold a 1/3 of my position and went BE. Really starting to believe in locking in profit as soon as possible. Watching 1.048, which if price stalls I will sell off another 1/3. If price pushes through then 1.6 will be the next area.

There isn't really a buying climax for AU so its kind of hard to really say for me when accumulation started, but basically AU has been being accumulated for between a month to a month and a half, which means that this has the potential for a significant run.
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  • #23,758
  • Mar 16, 2013 5:46pm Mar 16, 2013 5:46pm
Quoting Connected
Please would an experienced trader be able to confirm please my understanding of the accumulation phase:

'If we see accumulation during a long term range, we should see shrinking volume near support levels and an expanding volume near resistance.'

Am I right in the thinking that 'Smart money' is buying into the downmoves off of resistance and this represents the expanding volume near the range top, and also would it be correct to say that the low volume at the support levels is absorption. ie. the buyers are absorbing the selling...
I think I can understand the idea behind that, but I would rather explain it from a Tom Williams perspective. When he sees potential stopping volume, he watches for price to come back down to that area on low volume. That shows him that no one is interested in taking price down.

I am not familiar with Karthik Mamar, what I think is meant by the expanding volume at resistance when price is ranging in an accumulation period as price tries to break out of resistance volume increases, which if it fails to break through price comes back down, and if there is no volume back in the area of the potential buying then it is seen as no sellers and price tries to break out of resistance again and repeats till its able to actually break through.

That above is just my assumptions on what Karthik meant, if you want to understand accumulation, first look for climatic stopping volume. Mark the bottom of the price bar that has the stopping volume and watch to see if price keeps bouncing of the low on very low volume.

Here is an example on EU 4h, 2 yellow bars represent stopping volume, the green bars represent as price comes down to the support area volume dries up due to no sellers.
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  • #23,759
  • Mar 16, 2013 10:46pm Mar 16, 2013 10:46pm
Thank you for your detailed reply SimpleDev, much appreciated for a newbie like me to Volume analysis.

Looking at my notes from Tom William's regarding stopping volume:

Stopping Volume

Prices will start to resist further down moves and is frequently seen as high volume with price closing near the highs as buying must have entered the market.
Tracking the Specialists.
  • #23,760
  • Mar 17, 2013 4:20am Mar 17, 2013 4:20am
Quoting SimpleDev
You seem to be a profitable trader so I won't question your post.

However for the people that are reading this forum trying to learn forex, I would recommend using all of the tools in your toolbox. What I mean by that is even though you may only want to trade a 5m/15m chart study all of the time frames available to you from your 5m/15m up to the monthly chart. Also in your toolbox do your best to understand the previous sessions. Which doesn't mean that you will see clear SOS or SOW in every session.

Tom Williams describes VSA as "the consensus...
I am not that profitable yet, have to learn and understand a lot yet.
One thing that I want understand better is the relationships among sessions. What I commented in my previous post is more a pre-conceived idea than something based on VSA principles. VSA principles should trump any pre-conceived ideas.

So, thanks for your comments! I will my best to understand the sessions inter-relationships better. I really think it is very important.

By the way, because I was using that stupid pre-conceived idea, I was trying to fit the up move during NY session and, instead of pile the money in the street, I gave my contribution to the money on the street, i.e, I lost some... 10 pips, but lost.
Lesson for me.

Cheers!
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